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Avoid the Good Results Traps

Brent:

What are some of the consequences if your agency is caught in the good results trap? On this podcast episode, I interview Roger Sitkins, founder and CEO of the Sitkins Group, to talk more about this good results trap, the consequences, the impact that it may have on your agency, and how you can begin to escape areas of the good results trap. Enjoy the episode.

Brent:

Welcome to the Agent Leader podcast. My name is Brent Kelly and this is the podcast for agency leaders across this great country and beyond to strive to become that Best Version Possible. This is a special episode. I hope all episodes are special, but this one I've got a great guest with me, someone who's been on the podcast numerous times, but it's been a little while, so I'm excited and proud to welcome back Roger Sitkins, CEO of the Sitkins Group to the Agent Leader podcast. Roger, welcome back.

Roger:

Well, thanks Brett, and I'm very excited. I'm normally pretty excited about the type of topics, but this one's got me really thinking deeper than I have in a while, and I hope it challenges everybody.

Brent:

Yeah, I think this will be an episode that will certainly challenge agency leaders. I say this many times, if you are not driving the car right now, some of you might be, have a pen, pencil and paper next to you. Take some notes. I'm going to be asking Roger some really important, impactful questions, and I know per some of our prior conversations, there's going to be great value. What we're going to be talking about and actually leads back to initial podcast I did over a series of seven traps, and this is in our book, shameless plug, Best Version Possible co-authored by my guest Roger Sitkins. In fact, if you want a copy of the book, go to Sitkins.com/bvp, but we talk Roger in the book about these traps, these gaps, these things that get an agency's way. And one of the things that we had some conversations that's been several weeks ago now at this point is that we've realized that many agencies we talked to get good results.

Brent:

They really do. If you actually look at it, they get good results. And at one point, and I don't remember exactly, maybe you can remind me, it came up and one of us said, well, the truth of it is, I think it was you, Roger said, these good results, they're a trap. These results themselves are traps. So I want to spend some time unpacking this with you and talking about this good results trap, what you think about it, the impact that it has on agencies negatively, primarily, and why do agencies get stuck on it. So just start and leave it pretty wide open. How do you view the good results trap, Roger, and why do agencies or how do agencies get stuck in it?

Roger:

Well, first of all, Brent, we said it, it's really pretty new in what we talk about, and quite frankly, it's taken me too long to figure this out, maybe 40 years of working with very closely on an ongoing basis. And I realized some things that are pretty basic, some things we share in both our leadership program and of course the producer programs. We said, look, this is a great business. And I would guess that everybody listening says, yeah, it's a great business, or certainly I'm working towards having this great business. And what we say somewhat tongue in cheek at the programs is how many of you're making more money than you thought you'd make? And of course, either in person or virtual, the hands are coming up. I say, well, how many of you're making more money than your siblings or your friends? Most of your friends hanging out hands are coming up again, so how many of you're making more money than if you had a real job?

Roger:

Basically, all the hands go up, and then I say, how many of you'd be fired if you had a real job? Of course, people would start going, yeah, I probably would be, because there's tremendous freedom in having your business, whether you're the producer and it's the Me Inc. Book of business or whether it's an agency owner. There's a lot of freedom there. But what's hit me is I've looked at the results and I've looked at some of the traps that are out there that you've been talking about, is that the good results are not great results. They're not Best Version Possible results. There's a big gap between good and great. And I look at this and I think of Jim Collins classic book, good to Great, where he talks about the fact that good is the enemy of great, and I certainly would believe that the vast majority of people watching or listening have read the book.

Roger:

When I look at this, I say, and this is what hit me that I said, Brett, the good results, quite frankly are the enemy of Best Version Possible results because I'm making so much money and I'm building so much value, and I don't really think about what's the next level, what's the next level, and something what hopefully the listens have heard us talk about before. There's always one more question. There's always one more level. So when I look at this and I say, wow, that's really amazing, and I also think through the fact that the good results that insurance agencies, the ones that are really committed to growth, committed to profitability, the good results they get compared to most other businesses, most other entrepreneurial ventures are really good, and a big part of that is they have recurring revenue. And I say this again somewhat tongue in cheek, is that one of the biggest problems we have is one of the best things.

Roger:

We have recurring revenue. And what we see too often is we see producers, in my opinion, way too early in their career where they get up to where they're making 300, 400, 500, 600, $700,000 a year, way quicker than they thought. Again, better than people that are hanging around, better than people in their family, and they're living on that renewal book comes in the front door, goes out the back of the old saying, and we see them starting to coast. Now, the law of gravity says you can only coast in one direction. So when I look at people that are coasting along, I think, geez, what's really happening? And it scares me even more because I see these producers coasting during a hard market. So yeah, the hard market was really tough, and certainly in Florida where the property market got so crazy after all the storms and everything, people had a tougher time renewing accounts, but guess what?

Roger:

They renewed 'em. Retention stayed pretty much the same. So we look at this and I start thinking about, wow, what's really going on there? In fact, it reminds me of Warren Buffet's quote, it's not until the tide goes out that you find out who's been swimming naked. And so if we look at the results and we look at what Reagan's talked about in their growth in profit studies the last couple of years, 23, 22 had the highest organic growth rates agencies have ever had, over 10%, 11, almost 12%. I think one of the years there. The first quarter of this year, Reagan reported, I make sure I get my numbers right here. Reagan reported that it's 8.4%. Now they are projecting 10% for year end, but that's still less than what we had the last couple of years. So that means obviously some softening of the market things are starting to catch up.

Roger:

Even the profit where the profit was 23, 20 4%, they're projecting to ebitda. They're projecting 21.1%. I look at this and I say, wow, I'm getting profit now. 21.1% is still really good as a profit margin. Then I start looking at valuations. I think things are really going well. One of the things that you and I talk about and certainly part of the Best Version Possible journey, it's a proprietary KPI that we talk about key performance indicator, which is growth fit, set of organic growth and operating profit, add 'em together. What should your number be? So if we look at this for an average agency today and we say, okay, let's say they get the 10% plus the 21%, so that's 31 where our minimum for the agencies we work with are a combination of those two of 40, and we have some that are getting up to 50.

Roger:

In fact, you had on recently Chance Morgan, one of our longtime clients and friends, specialty risk where their organic growth rate year over year for the last 12 years has averaged 32.4% and they've gone through three employees to a hundred employees, and it's all organic growth. They didn't buy anybody. So on one hand you go, well, 10% growth and 20% profit's pretty nice. That's 30. But the Best Version Possible says what should be at 40 or 50 in that number. So maybe a long response here, but this is what's driving me crazy is I see people sitting here and they're getting, again, compared to everybody else, good results. In fact, most people would say great results, but when I look at it, I look at the gap between what they're doing now and how far they can become. I get frustrated for, and what's interesting to me is the best agencies we work with are frustrated also because they know there's that next level.

Roger:

They know they're leaving millions of dollars of value on the table. Now, when you think about just the profitability itself, okay, every a hundred thousand dollars of unrealized profit either through a lack of sales, lack of expense controls, financial models, but unrealized profit is a loss of 1.2 million of value. So every a hundred thousand is 1.2 million. It doesn't take long for you to add 5, 10, 15, 20 million of value. Then I wanted to share one more thing before we get into some of the pre-planned questions, if you will. Several of the agencies over the last three or four months now that I've been working with, you've been working with people we know, our clients, our members. I've been asking them, and it's really the question, what will your profit be on your next a hundred thousand dollars of new revenue? Now, the vast majority, by the way, Brett, I ask people, as you know, that we're 3 million agencies and some 250 million agencies that we work with, all but about three or four of the CEOs or CFOs that asked that question responded with their current profit rate.

Roger:

So if they're at 30% profit, they'd say, well, on a million dollars, I'd make 300,000. And I challenged him. I said, you know what? I disagree with that. I disagree with that. And he said, why? I said, well, if you added a million dollars of value, a million dollars of revenue in the next three months because you executed the strategies we've agreed upon, would you increase operating expenses at all? And they kind of go think about it. They go, no, I guess not. See, I think, and I know I'll get challenged on this and that's fine. I firmly think, I believe that your next million dollars of revenue probably a 50% profit because you'll have compensation for the producer and you might have, and I think it would be smart to have some service team bonuses on the new revenue, but other than that, your normal operating expenses don't improve.

Roger:

Well, here's really exciting to me. This is where I go, okay, this is a great result. This is a Best Version Possible result. A million dollars of revenue and a $500,000 profit is worth $6 million of value 500,000 times 12. So the agencies we work with that are the 5 million, 10 million, $15 million and they're doing four or 5, 6, 7, $8 million of new revenue, look at what they're doing to their value. Now, will it catch up maybe next year? But if we can keep growing at the rates that our best members are growing, I can stay ahead of the curve and that profitability starts stacking on top of each other, top of itself. So to me, I say, look, first of all, accept the fact that maybe those good results that you've been so excited about and you should be, they are great results, but they're good results. They're not Best Version Possible.

Roger:

I remember the first time you and I talked about this, in fact, I challenged you had an in-person speech or keynoting at an association. I said, talk to them about the good results trap, but then say, talk to them. I think I said it this way, correct me, but I think I said, Hey, talk about the good results and then say, but you know what? It's a trap. It's a trap. And I know the first time you said it, people went, oh, wow. So to me, we start looking at this and saying, are we willing to accept good results? But later in life have a bunch of regrets? We realize that we've left millions and millions and millions of dollars of value on the table and those agencies that are thinking of what we might sell in three years or five years, why wouldn't you do everything you possibly can to accelerate your profitable growth? It's not by doing what you've always done, even though that was good results.

Brent:

Yeah, yeah. Well, Roger, we did. It was before, and I had a week of a couple different speaking events, and we started talking about that. And so I asked the audience, it, let's just give a shot. And when you ask how many getting good results about every hand went up, the stuff that you said earlier about making more money and people around you, and yeah, you sit there and you go, well, gosh, there's not much pain. At least surface level, they don't feel a lot of pain. The goal isn't just to make up pain. That's not the idea. But the idea is to see what's really possible. And I think about this a little, maybe this is a bad analogy. I love my sports analogies, but it reminds me of a good let. It could be pro or college, but let's just say college, a good college team that plays a really bad non-conference schedule, and they're like, we're loving and oh, we're amazing.

Brent:

And then the reality hits, you're like, Ooh, maybe we're not as good as we thought we were. And I think for a lot of agencies, and you referenced the Warren Buffett quote. I mean, I had a call yesterday with an agency leader, a prospective member of our network, and excited to hopefully get started, and they were very aware of that. They said, we're very aware that some of the results we're getting in the last two years are super inflated because of market conditions and inflation. And we realize right now is a time to position and have a foundation built with some of the key areas of our people and our processes to ensure that this is not a flash in the pan, that we want to make this sustainable, predictable, and as we like to talk about guaranteed growth that you could have for your agency.

Brent:

So Roger, thanks for unpacking the good results trap. I do want to take a minute because we're going to dive in as far as specific areas and different traps. One of the things that we've introduced at the Sitkins Network for our members is a brand new leadership program. And Roger, you referenced that. Now, we've done things in the past at different programs and camps for leaders, but we realized that it all starts with leadership. And we want to make sure that in our process in working with new members, new agencies that come on, that the first thing they get to experience is to understand the fact that what they do as leaders really matters and to help them with clarity, to help them with confidence, to help 'em understand agency capacity to help them be able to help their team grow and develop across the board.

Brent:

And by the way, we're going to talk about some of this, Roger, and I want you to help me unpack it, but make sure as leaders we're on the same page because I can tell you I have been on assessment type of calls or initial calls with the agencies, and I'll ask a group of leaders and one leader says, oh, we're doing great over here. And the same leader or a different leader on the same call goes, I think we're terrible here. And I go, wait a second. We've got some misalignment. So I do want to reference this before I get into this. For all the agent leader listeners out there that if you're interested in learning more about the experience, the Best Version Possible experience and what membership can mean in terms of financial returns, as well as culture returns, organized processes, greater people development, the first step is simply to book a call.

Brent:

And all you need to go to is Sitkins.com/bookacall. We'll have a qualifying call and learn to see if there's a potential fit in working with your agency. We love the opportunity to see these success stories and some of these we've featured on this podcast. So with that, Roger, I want to talk a little bit about your thoughts. Of course, we're going to be launching this leadership program for our members. And again, it's the first step. I mentioned the word clarity. I love the word clarity. Clarity is mentioned in our book. And to me these questions, and we've talked about this for a long time, but understanding leadership clarity, agency clarity is based around three questions. Where are we? Where do we, and I'm going to add this word ultimately I really want to go and how are we going to get there? And so I want to get your perspective. I've talked a little bit about this on the podcast, but I want to get Roger's perspective on this. You've been doing this for a long time. Why does clarity matter so much and why do agencies in your perspective, in your sense of things, why do they struggle with this with the clarity?

Roger:

Well, they struggle with it. Let's start there because they don't need to do anything different. Again, it's a great example of the good results trap. Well, we should have an annual planning session. We should review it quarterly. We should do this, we should do that. Yeah, but we're doing really good, man. Are you kidding me? Look at the numbers we are doing really, really good. So to me, clarity comes back to a great saying, and I certainly heard it for the first time from Dan Sullivan. All progress starts by telling the truth and clarity is, okay, where are we truly today? Not like, well, we're doing really good. Where are we? What's a deep dive on where we really are and what caused us to get here? Where do we really want to go over the next three to five years and using our terms, the Best Version Possible?

Roger:

What does a Best Version Possible of our agency look like in three years or five years? Normally we want to work just three years, kind of have a rolling theme on that rolling model. And then finally, what is it going to take to get there? It takes not doing everything you're currently doing. It takes refinement. So when I look at this, I say clarity is about having that clear laser focus on where we're going and exactly what it's going to take to get there. And all of this comes down to clarity on what's the end in mind, what's the end in mind and what do we specifically have to do? And all too often I've had, we'll have discussions like this with a prospective member, and let's say they're a $5 million income agency now they've been in business 20 years. I'll say, where do you want to go over the next three years? Oh, I'm going to grow by 50%. Okay, took you 20 years to get here. Well, we will sell more insurance. Well, how are you going to do that? We're going to sell a lot more insurance. And I understand it because again, good results, we can kind of think that way, but not having an absolute laser focus around this is exactly where we're going, this is exactly how we're going to get there. And that doesn't mean it doesn't change. Everything changes, but having that common clarity is crucial in this.

Brent:

Yeah, I was thinking of more athlete analogies here, Roger, and I dunno if these are good or bad, I guess there's different stories here, but I just think about some of the elite, the best version athletes and performers at some point. In fact, for all of them, they were good enough in their careers where they could have just been like, Hey, I'm good enough. I'm going to make enough money. I'm still pretty well known. Life's good. I think about even going way back, there's some other stories beyond that. But when Tiger restructured his swing or didn't have to do that, Michael Jordan didn't have to develop a jump shot. He was okay without it, but he did this higher level of thinking, and I think part of this is this vision of going, well, what do I really want? I don't want to win one championship. I want to win multiple championships. I don't want to win one tournament. I want to win multiple tournaments. And so to me, I look at these things. You said that this is thinking bigger picture, and I don't know this is anything we pre-planned Roger, but I think it's important if you ask agencies what frustrates them, you will get a multitude of answers, correct.

Roger:

Oh yeah.

Brent:

But if you stop and say, what is it you specifically want three years from today? How are you going to get there? What does it look like? They will often stumble and mumble, whoa, we're going to kind of do this. And I don't know, we haven't, right? There isn't a strategic model or financial model. And if you could, Roger, maybe I talked about some of this in previous episodes, but maybe give some examples of strategic or financial models that kind of end in mind, or at least ways that agencies can think about this at higher levels.

Roger:

Well, one of the most important strategic models, of course, is the zones that we talk about, the Red zone, green zone, the blue zone, and we can expand on that a little bit more, but the reality is that most producers are stuck in the red zone, the majority of their time caught in the service trap. And our goal, of course, is to get 'em in the green zone 80% of the time, pretty straightforward. The blue Zone is getting the service, which we're going to talk about in a second, getting the service people in their right zone 80% of the time. Some other things we talk about the ultimate growth strategy, which by the way works 80 to 90% of the time when people say, oh, I get it. But then it's not like something they've just written down and they're going to forget about. It's where leadership says, this is the strategy we're following.

Roger:

I think we talked about this in a previous podcast, but I'll never forget the time you and I, this is pre Covid. We were working with, I think it was an $8 million income agency, and we had a session about what today is called the Ultimate Growth Strategy. And the president got up and he said, the bar's pretty low on our industry. We're going to focus on one thing. And they were, again, a nice size agency, but they only had a 3% organic growth rate, and in six months they went to a 9% organic growth rate because the leader stood up and he said, here's what we're doing. And he made sure everybody did it, and he kept his other partners, other managers accountable by talking about it all the time. Ultimate growth strategy, as you know, and people have probably heard from us, round out, retain and replicate the top 20% of your customers.

Roger:

Sounds easy. Well, it's simple, it's not easy. And when leaders jump on it and say, this is exactly what we're going to do, it's amazing. As far as some of the financial models, well, this is something I always get a big kick out of. We'll be doing a session as we've done in the past for leaders and now with our new program, which we're very excited about, the agency Executives Edge. We'll ask 'em, what sort of a profit would you like to make? And the thing used to be 25%. So I always remember being on stage in the early days and doing all these keynote speeches, and I'd say, how many of you'd like to make a 25% profit? Oh, yeah. I said, do you want to know the secret to making a 25% profit? Yeah, I don't show this to anybody else. You can only spend 75%.

Roger:

Of course, people start laughing, but the reality is your financial model should not have your profit as the bottom line. It should be the top line in your financial model in all your numbers, the KPIs you're looking at, we are going for a 25% profit and our growth rate will be this, thus our KPI of growth Fit will be X. So we look at this, say, well, if we have to have 25% left, we can only spend 75%. Where do we spend it? 50% on service and administrative, 25% on producers and sales expense. How can I get my sales expense to that level? Well, number one, you have to have a high percent of your accounts you don't pay a commission on because they're house accounts. So there's a lot of ways we can play with it, but certainly having a financial model that's based upon, boom, this is exactly where we're going.

Roger:

Another one that I love talking about, and this actually has been around for a while because my mentor, Gary Holgate said this one time, and I've never forgot it. He said, one of the biggest problems is that agencies normally throw more people at the problem versus solving the problem, but we've got a backlog here, throw more people at. We can't get this down, throw more people at it. We need to add more producers right now because the current ones aren't producing. Go hire a bunch of them. And he had the coolest thing he said, it's called management by the numbers. Now, we wouldn't necessarily agree with a hundred percent of today, but using today's model and our model today, our goal is to challenge agency leaders to get to $300,000 of revenue per employee. And in the best practices, now the best agencies are somewhere between two 50 and 2 75.

Roger:

That's a big number. But let's assume, Brent, that we're talking and you come in and you say, Hey, look, we need to add another person. And the KPI in our plan is $300,000 of revenue. I would say to you, Brent, tell me exactly how that person directly or indirectly will allow us to create, generate $300,000 more revenue. If you can tell me, I say hire 'em. And if you don't have a specific plan for it, I say can't have 'em. I'm not just betting on the co, but these are examples of some of the financial models that need to be part. They don't have, look, here we go again. You don't have to do anything we're talking about and you're going to get good results. Why? Because you're listening and you're trying to get better. But if you truly are saying, Hey, what is the Best Version Possible and how can I recoup the millions that I've been leaving on the table? Well, some of these things have to be part of it,

Brent:

And we're so excited. You mentioned, again, the program agency executive edge program for leaders, and the first session of this is all about these questions around clarity and getting leaders on the same page. And we use that phrase a lot, but it's true where they're going to walk out and go, okay, we're aligned together here on a model, and we agree upon a model. And I think it leads to the next two sessions that we help leaders walk through is understanding the word that I know you love, and you've talked about in this podcast, what's coming, the word capacity. And you kind of already hit on this, Roger, so I want you to take it deeper because you talk about we'll just throw more people at the problem, more people at the problem that's not fixing the problem. And so what we're going to help agencies with is this idea of capacity, both from a sales capacity and a service capacity, both very important in understanding that ultimately, Roger, as you said, to increase that revenue per employee, which is critically important for so many areas. So I'm going to leave this wide open. I almost want to say, Roger, talk to me about sales and service capacity. But I mean just really why is it so important? Why does it matter so much?

Roger:

Well, number one, are you a sales organization?

Roger:

Are you a sales organization? And the reality is, in fact, I jumped in my mind here one time for CNA insurance company. I was doing a program for brand new producers. They had to be in the business less than a year. And I asked them a question. I said, how many of you believe you're truly part of a sales organization? And maybe half the hands went up. I said, how many of you right now are spending the vast majority of your time in sales and sales related activities? One person out, I think there are 80, I can't remember the number. There are a lot of people there. One person raised his hand. I said, the rest of you are already caught in the service trap. Oh, yeah. Oh yeah. So it's pretty crazy. We look at this, we kid around about this and say, what's the definition of a producer one who produces, in our case, that's one who produces and meets and exceeds their goals?

Roger:

Because even some of the best agencies out there, half their producers or fewer hit their annual goals. Now, one day, one of our attendees said, well, I can get all my producers to hit their goals. We'll lower. I said, no, no, no, no. We've got to get capacity up. So capacity means what? It's real simple. TSS, time spent selling our goal, and I alluded to it a few minutes ago, the green zone, getting the producers in the green zone 80% of the time. There's only four things that producers should do, make sales manage relationships, have a continuation process, not a renewal process, and fill up their pipelines. That's it. If they've listened to your podcast at all, if we listen to what I've been on, we talk about this all the time and people, yeah, we're really thinking to, we're thinking about doing that. We're fixing to versus saying, we've got to get our producers freed up and out of the red zone and spend the majority of their time.

Roger:

And in the perfect world, the perfect model, which we get 'em to, it's 80% of the time in sales and sales related activities. So it's really the world's greatest producer recruitment program. Get your current producers spending the majority of their time producing. And what this does too is it creates a role model. As we bring new producers in, they go, oh, she doesn't spend much time in service. Look what she did. Look what he did. And now they do ride alongs. They figure it out, but it's getting them to understand their role salesperson. They make sales pretty simple, and we just don't see it happening at the level it should. Bottom line is you've got part-time producers, and here's again, good results trap. We have part-time salespeople, and we're doing pretty good. I wonder what would happen if we made them almost full-time salespeople, what would happen?

Brent:

Yeah, you're a hundred percent right. I mean, I'm smiling here. So many things that I hear in talking to different agencies. In fact, I had a call recently on my mind, but with an agency, again, looking to be part of our network. And I said the comment, I said, it sounds like you guys are an excellent service organization that does sales when it's convenient.

Brent:

And I mean, they laugh because they go, you're right. And you think about that from a leadership perspective. That's the job and duty of a leader that the vision of, Hey, we are a dynamic sales organization that provides excellent service. That's what we do. We can't continue to grow. And I'm certainly, we're not going to thrive as an agency if we don't make that a priority because at some point, these good results, if we're not careful, are going to run out. And we've got to be very intentional with it. To flip this a little bit, because again, we talk about sales and service capacity because I think a lot of the agencies, what they'll tell me, and maybe they've told you, I'm sure they have, Roger, is that in fact, I had one agency goes, we're at such a place right now that we have some of our team that they don't want to make sales because they're too busy, they're too backlogged. I thought, you're telling me in your agency you're actually preventing sales? Yeah, we kind of have to because we're just so busy. So again, one of the parts of this program is to understand green zone sales capacity and then blue zone, which is service capacity. So maybe share Roger in your own way. There's good results trap and how it prevents agencies from having great service capacity as well.

Roger:

Well, number one is when we say service capacity, that doesn't mean producers doing more servicing

Roger:

Because we've got to get the producers out of day-to-day service. Now, let's define it, day-to-day services. Everything that happens in between renewal dates other than an emergency in flight, there's certain things that an emergency happens. There's certain things that producer, she's the only one. He's the only one that can get in there and solve it for whatever reason. That's called the real world. But we also know that when producers get involved in day-to-Day service, and we've talked about this before, we always ask this during our service person program, our account manager program, do your producers get involved in service? Yes. If they took 10 changes today and gave them to you, how many would have complete accurate total information that you could process the change without going back to the producer or back to the client? Normally two out of 10 would be complete. That means they've got an 80% error ratio.

Roger:

If you have an 80% error ratio in a job, you get fired from it or moved to a new job. So what we have to do then is have a clear understanding of what is that day-to-Day service, and what things do the producers need to stay out of? Because the minute they get caught in the service trap, everything starts sticking to 'em, and they tell their customer, you need anything at all? Call me, call me, call me. No, my service team. In fact, here's a directory that shows you exactly who to talk to for what. And the reason I'm sharing this with you is because right now, as I've been out here with you today for an hour, I guarantee I've had some clients that have needed some sort of day-to-Day service, wouldn't want them to wait for me to get back, and I sure don't want you to wait in the future.

Roger:

Here's who you talk to, because the reality is the client doesn't want to talk to the producer. They want their item handled. Now, certainly we could argue, well, what about the really small Bob policy where the only person they know is the producer? That's still their problem. You have it educated the customer that there are multiple people on the team. So one of the big things we talk about with really the whole agency, but it really bears down on this problem, beliefs, behaviors, and results, beliefs, producers shouldn't be involved in service, okay? That's a belief, that's a mindset. And their mindsets for every area, behaviors, well, we educate the client on what to do. We make sure the service Peterson does a great job. We keep the producer aware of what's going on in their accounts and we get that done. But when we look at results, if our producers are still getting involved, then guess what?

Roger:

There's not congruency between beliefs. They shouldn't be there and actual behaviors. So anytime you're not getting a result, I know we've talked about this before, but anytime you're not getting the result you want, you've got to go back and say, the behaviors must not be right. Again, go back to the source of the problem. A couple that jump out. In fact, we just yesterday had a session, as you recall, we had 23 account managers and service leaders on with one of our larger members, and we were talking about what's going on and what's happening. And we asked, we were asking for feedback. They had already completed the account manager program. And I always hear this. I know you hear Carrie hears it, two big things of service people share. Number one, please eliminate as much as possible interruptions. Because one of the reasons they can't handle as many transactions, as much revenue as we'd like 'em to is because they're handling everything two or three times because it's incomplete upfront.

Roger:

Or when they're working on something really important, they get interrupted. They have a minute, can I see? Or they get a call from the producer, do you need anything from me? If I needed something, I'd let you know. Okay. And it just drives 'em crazy. So number one, how do we eliminate interruptions? How do we talk about that? Say, look, don't interrupt me for day-to-day service when I'm busy working on something, when I'm busy working. In fact, you shouldn't even be here bothering me or calling me. And then the second one, which may be the bigger of the two, remember we said, other than an emergency in flight, we have to define what an emergency is. And the agencies that have jumped on this and had a very open dialogue between sales and service and say, look, what's an emergency? What's an emergency within our team?

Roger:

It doesn't have to be agency wide within our team. What's an emergency? And when they do that, what's really fun, and the account managers always give us feedback on this is the first time they get to save to a producer. Please help me understand why this is an emergency, because it doesn't match up with what we said would be an emergency. And they love seeing it for the first time. And the producers go, you're right. And again, it won't be perfect, but if we can say, define what an emergency is, producer brings you something that's not an emergency, iup, you challenge 'em. If it is an emergency, it's an emergency. Drop what you're doing and take care of it. We don't want to lose a big account. So those are some of the big things there. The other, of course, is, which is equally as big the service people have to maximize the technology they have, the emergency management system, all the initial apps that they have to make their job easier and better. And Angela Adams, our friend, who I still believe is the best consultant for internal operations for agencies. Every time we talk, I ask her the same question. I'm sure I mentioned this a couple years ago in the podcast, I always ask it, what percent of the system is the average agency using today? She said, maybe 50%. That's crazy. That's crazy. If your people are handling everything wrong and then they're not using technology to improve productivity, guess what? Your sales capacity goes down because service capacity is down and it's just a mess.

Brent:

Yeah, Roger, going back to this earlier about throwing people at the problem. I mean, that's another example of that. I mean, it could be we'll add another producer to our culture that doesn't focus on production. Well, they're probably going to slowly fall into that trap. Now, maybe you get lucky, but maybe not. And the other part is let's just get more people to utilize technology.

Brent:

So it cascades, I think all of this as you're saying this and notes I wrote down, I mean overall, especially with the service capacity issues, there's just a number of inefficiencies and you'll see them time and time out. And these all obviously work together. Obviously I talked about in our leadership program, starting with Claire to understanding the business model, understanding the importance of sales capacity and so many things that Roger talked about. Because by the way, one thing that you didn't mention, and we don't need to go very far, it's pretty obvious, is that we talk about this is part of the problem might be we have too many accountants paying us too little money. So you've got these things and go, oh, we will just keep putting more people. Well, it doesn't fix the problem, right? The problem at hand is you're not utilizing technology.

Brent:

The problem at hand is we don't have producers focused on green zone. The problem at hand is we're not utilizing all the systems that we possibly can. The problem is we have too many accounts paying us too little money. So big part of this is getting to the heart of the matter and being honest. As you said, all progress starts by telling the truth. Which leads me to the last session we have on our program, and I want to talk about this. This is about leadership and accountability in leadership. Now, we've done other episodes around accountability, but I think so much of this, we're talking about Best Version Possible. This to me, Roger, is one of the, if not the biggest thing that we see as far as going from good and good results to Best Version Possible. This, I know this that are most successful in some of the case studies we reference, one of the things that I can say that is very similar about them is they have very consistent and very high level leadership. And the idea of the fact is that this is the way we do things. Get it? They believe in culture, they believe in relationships and all these things, but they also believe in the a word accountability. So again, general question. I know this could go a million different ways, Roger, but how do you believe that accountability truly fits into this Best Version Possible leadership?

Roger:

Well, before we do that, I want to redefine something on the service thing because I didn't really do it clearly. Okay, what is the blue zone? The blue zone, which is blue is such a wonderful cover. It's very calming. The blue zone is when the service team members, the account managers, account executives, whatever the title may be, service reps, it's when they're working uninterrupted by other people, their productivity, their ability to work goes up so dramatically because they're not getting interrupted. So our goal, I mean, think of much more. All of us could get done if we could work 80% of the time, and we control what we work on, not we're reacting to other people throwing stuff at us, whether it's electronic or they run up and throw a piece of paper at us. Okay? So please keep that in mind. Red zone, green zone, blue zone.

Roger:

Okay, accountability. Well, this is something we ask at in-person events, which certainly don't happen as much as we used to love them to do. But now we ask on online events too, virtual events. How great. In fact, I want all of you to think about this. How great would your agency be if everybody in your agency did everything they said they were going to do? Wow, that would be wonderful. Okay, what if they just did 80% of what they said they're going to do? That'd be wonderful too. But what we see all too often is we have a meeting, and it's the classic thing about why traditional training fails. You go to a one-time event and there's no, no reinforcement, and we think everybody's going to change overnight. And no, they won't, especially if you don't remind them. Okay? And if we're quick start type owners, very aggressive, very A type personality.

Roger:

And we say, okay, we're going to go do this. And then three or four months later you say, wait a minute. I thought we said we were going to do this. Well, yeah, we did, but nobody checked on us. Nobody checked on us. Okay. So I look at this and I say, I guess if I had to pick one word and going along with you, it is the a word. It's the culture and cadence of accountability. And one of the biggest breakthroughs we've had recently is the fact that every agency in our less than humble opinion, every agency should have a promise based culture. If you've taken any note today, that's one to write down. It's a promise based culture. It basically says that as an agency to my team members, I'm going to make a promise to you. I'm going to make several promises to you.

Roger:

Here are the resources we're going to provide you. So as a producer, guess what? We're going to have an office. We're going to have the carriers. We're going to have service people. We'll have marketing people, we'll have claims people, we'll have value added service, whatever. We we're making a, we're going to give you the resource. And of course, we want one of those resources to be with the right agencies. Yeah, we're going to provide you the ongoing training and development program through kin. There it is. But that's what some of the best ones are doing. I'm going to make a promise to you, but in return, we want to promise from you. We want to know what you as a producer are going to do. Will you have a high performance team meeting every Monday? Yeah. Will you make sure your service person always does the agenda?

Roger:

You don't mess with it? Yeah. Will you spend 80% of your time in the green zone? Yeah. Will you line on a regular basis? Will you super qualify prospects that you deal with, et cetera, et cetera. So we've created this document, the Two-Way Promise, and the cool thing about it, it's not a legal document. It's basically saying, let's document what we talked about because I've heard you say it before. I've certainly said it. If it's not documented, it never happened. Someone could say, well, I didn't remember it that way. I don't think that's exactly what we said. So you document the two way promise. So the cool thing about it, by the way, it makes sales leadership much easier. Now, the sales leaders can say, wait a minute. You're not getting the results we agreed upon. You're not even close to your goals. Let's go back and look at the behaviors.

Roger:

Let's look at what you promised. Well, have you been doing your Tuesday, Thursday reach outs? No. Have you been doing low risk practice, relentless preparation rehearsals before you go on a new proposal? No. Have you been doing enough research before you even call someone? No. Okay. Guess what? Your behaviors were not congruent with your beliefs, thus, your results are not there. Please help me understand one of the most powerful phrases. As you know, Brian, please help me understand why you're not keeping the promises you made. It goes both ways. If the agency isn't keeping its promises to the producer, guess what? Producer challenge challenge it. But this whole culture of saying everything we do is upon promise making and promise keeping that goes all the way to what are the promises you're making to clients? What are the promises you're making to your insurance carriers?

Roger:

But when we get people that start saying, look, let's agree upon number one, what the promises are. Let's agree upon what we would refer to as the Best Version Possible business model, the BVP way of doing business. This is the way we do business. This is our business model. And I know you've talked about this before and it's just one of my favorite, favorite quotes. Your current business model is perfectly designed for you to achieve the results you're currently achieving. We talk about it all the time. Why? Because a true statement, well, I'm not getting the results that I want. Well, then your business model's wrong. I don't have a business model. Exactly. That's what's wrong with your business model. You don't even have one versus saying, this is the way we do business. These are the promises that we've made to each other. And so producer and account manager, high performance team, they make promises to each other.

Roger:

And then everybody starts realizing like, wow, they're actually following up on this. Wow. And here's, I think the cooler thing, Brent and all of it. It creates a more engaged team, more engaged employees. Engaged employees are happier, they're more productive. Guess what? They don't leave. They don't leave because they love the culture. They love working in a situation where they go, you know what? Everybody on our team is doing exactly what they said they were going to do. Do we have some breakdown sometimes? But we don't have to get in a fight. We might even just remind, Hey, don't forget, we agreed on this. Oh, you're right. I forgot. Thanks for reminding me. And when I start hearing those types of stories from the leaders, they're going, it is so cool that our people are just, Hey, it's a little nudge because we all forget. So without accountability, quite frankly, everything else falls apart.

Brent:

Roger, and I've talked about this numerous times, but I feel like I can ever say enough, the number one job of a leader is to grow and develop your number one asset, your people. And the bottom line is this. Anybody listening this already is that in your agency, if you have people that aren't performing well, they probably don't like accountability and your best performers do. And it's like, well, who do you most want to serve? It's very interesting to me, agencies that we oftentimes bow down, so to speak to the, well, I shouldn't do accountability because some of my poor performers don't like it. No, that doesn't make sense. Going back to your business model, that's your business model. Just like you overserve, sometimes clients that don't pay a lot, we might overserve sometimes people in our agency that really aren't that bought in. And again, this comes back to the culture.

Brent:

And I also think too, and I've shared this analogy many times, I think it's so much like college sports today, like NIL and all the recruiting game out there for agencies. It's kind of the wild, wild west. And you've got people that are trying to take your people from different states and all these kind of things that we see. So this all comes back to if we can develop this culture, it obviously helps us to recruit. It obviously helps us develop our people to be that best version. It helps us retain our best people. Say, I would never want to leave this environment, this culture where I'm continually striving for that Best Version Possible, of course, a term that we talk about. And then I would say one more thing on this, and I want to wrap this up and give you some final thoughts here.

Brent:

Roger, we've talked about results. There is no doubt that there is a higher of results for agency. But Roger, you hit it on the end. The big part of this to me is allowing agencies to have more freedom and have more options. Whether you want to perpetuate a year, three years, five years ago, it's way down the road. Why not give yourself more options, allow more freedom? And by the way, it's okay to have fun while you do this as well. And so many of these things, oh, this has worked. Yes, but it provides so many greater options and freedom long-term down the road for your agency. So I do want to state this. I mentioned this earlier on, if you're interested in learning more about the things that we do with agencies, in fact, it's not really about us at all. It's about you as an agency becoming that Best Version Possible.

Brent:

If you want to take that first step, go to Sitkins.com/bookacall. And what's going to happen, I'll be very clear. It's a short call. We'll get to know your agency more, and if it makes sense, we will then have a next call where we're going to learn more about your agency at a deeper level. And we, in many cases, Roger, and this, we'll provide your agency a plan before we ask for anything financial from your agency. We want to know if it's a good fit. We want to provide you a path and a plan upfront to go, this is where I want to go. Or you may determine, this is not where I want to go, but we want to provide you those options as well. And then all of our members, and one big reason why we had this podcast today and brought Roger on, one of the very first things you'll do as part of the Sitkins network and the membership is be able to attend a program like this, the agency Executive Edge, to be able to get clarity, to build confidence, to have alignment in your leadership. And as Roger said, have a business model that you're proud of, a business model that you all rally behind. So Roger, that's my spiel on things because if they can't tell, hopefully they know. We're both passionate about helping agencies be that Best Version Possible. So closing comments for you, and then we'll wrap this up.

Roger:

Well, first of all, good results trap. It's easy to stay in it, and you'll do okay compared to other people. But my big concern is when I see people that are edging up towards the end of their career, time to sell the agency, whatever it may be, whether it's internal, external, is they realize, holy smokes, I've left $10 million on the table. I've met $15 million on the table, whatever the number is, smaller agency. Maybe it's two, three or 4 million. It's still a lot of money. So to me, the key is how do we escape the good results trap? Well, it's an awareness problem, number one. And then how do we execute a Best Version Possible plan? First of all, you have to have one. But if you're looking for the freedoms that Brent's talked about, and these are financial freedoms, they're relationship freedoms, they're time freedoms, they're fund freedoms, then it's all about getting a plan in place that gets you to the freedoms you really want and the financial results that you really want. It's not for everybody. We understand that. But if you understand and if you realize, holy smokes, we are in a good results trap, then let's have a conversation, see if there's a fit.

Brent:

Yeah. Thank you Roger so much. I appreciate it. We had almost a full hour here, not a full hour of great conversation. Again, we want to continue to add value to you, your agency, your leadership team, to become that Best Version Possible. One other note, if this podcast is adding value to you, wherever you're listening to whatever platform you're listening on, please leave a rating review. It's something everyone has to ask. That is a podcast. You appreciate it. It helps us grow and share it with someone. Say, Hey, I heard something that might add value to your day. Take a listen to this, watch this, and on that step to your Best Version Possible. So Roger, thank you again so much. Appreciate you as an agent, leader, listener. Wish you all the best in your success. Take care.

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